The course requires that you are comfortable with financial statements.
Undergrad ACCT-UB 65 Concentrations
Accounting
Entrepreneurship
Overview
Entrepreneurs and promoters seeking funds to launch or grow a business
must present a business plan to investors. Executives need a plan to
monitor whether business outcomes track expectations. This course
integrates forecasts of key business drivers into financially viable
plans using Excel. It focuses on building business plans, not financial
statement modeling for valuation or statistical forecasting. The course
requires financial accounting and strongly recommends managerial
accounting.
This course will be offered only for undergrads; it will not be
cross-listed.
Takeaways
You will learn to do the following:
Incorporate the drivers of sales and sales growth into business plans
Incorporate expense drivers into business plans
Incorporate drivers of operating working capital and fixed capital into
business plans
Tie the components of a business plan together into a cohesive set of
financial statements
Identify causes of variance between forecasts and actuals
Prerequisites
Financial Accounting. The course requires that you are comfortable with
understanding financial statements.
Recommended courses
Managerial Accounting is strongly recommended but not required:
Understanding how to compute costs of products and services and
incentive issues related to managing costs is crucial to building sound
business plans.
Patterns of Entrepreneurship
Materials
I use my materials. Therefore, no textbook is required, and you need not
purchase anything.
Attendance and penalty for missing classes
Requiring attendance is necessary for several reasons. First, you
incorrectly assume you can catch up on a missed class by watching a
recording (if available). Videos do not engage your brain as much as a
live class. Second, less than 20% of you watch the recording (if
available). You are then lost in class, which provides the wrong signals
to me as an instructor. Third, your absence hurts class discussions.
Fourth, you miss out on feedback if you do not work through the questions
I pose in class. Fifth, I lose the feedback since there are fewer
questions.
The policy below will be in effect only after the add/drop
period.
Without mandatory attendance, attendance is often below 50%. Therefore,
though I dislike doing this, I penalize absences. If you anticipate being
absent for good reasons, please email me well in advance. Please enter
"Excused" on the attendance sheet described below to avoid the
penalty if I approve. If you miss a class due to emergencies and cannot
tell me in advance, do not panic. Take care of the emergency first, and
then email me. I will permit you to change the "Absent" to
"Excused." But if you miss a class without a valid reason, there
is a penalty, as stated below.
For sections meeting in 150-190 minute sessions, you will lose one
grade (A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY missed
session unless you were explicitly excused via email. Thus, if you miss
two class sessions, you will lose two grades, and so on.
For sections meeting in 75-80 minute sessions, you will lose one grade
(A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY TWO missed
sessions unless you were explicitly excused via email. Thus, if you miss
four class sessions, you will lose two grades, and so on.
Please sit in the same seat in every class and display your name tags. For
Zoom classes, you must keep your video on AT ALL TIMES. You must also have
a good working headset or mic, as it is extremely rude to be inaudible and
force me to ask you to repeat yourself. After entering the class, please
mark yourself present in the first 20 minutes on the OneDrive sheet (link
posted on Brightspace).
You will be marked absent if you are more than 20 minutes late unless it
is because of factors beyond your control (traffic, subway, or
interviews running late). You will also be marked absent if you leave
the class early unless you have my permission or get it afterward. You
will get an F in the course if you are caught cheating on the attendance
sheet.
Exams and Grading
There are no in-class quizzes, midterms, or final exams.
Please read about the penalty for missing classes above.
Assignments: 50%
Final project: 50%
System Requirements
You need to be in the following systems before the start of the first
class:
Albert
NYU Brightspace
If you are a non-Stern student, Stern automatically creates a Stern
account for you when registering for a Stern course. All class
emails are sent to your Stern email, not NYU email. Please forward
your Stern email to your NYU email.
If you are blocked from accessing these systems, please ask the
administration to expedite matters. Given the complexity of these
systems, I cannot manually add you to any system.
Only registered students can attend. I cannot override this NYU rule.
You will need a computer in every class. Either MAC or Windows will
work.
All assignments are mandatory. I will email you once the assignments are
ready. You will then get an email from Almaris with your user id and
password. Log in to view the online assignments at
http://www.almaris.com/assess/. The email is sent to the email official Stern email. The Almaris
password is different from the Stern password.
You can retrieve the password anytime by entering your official email
(no aliases) and leaving the password blank.
You can learn concepts from others but must work on the assignment
alone. You may be called to explain your answer to the assignments in
class.
I might update the deadlines as the course progresses. The deadlines
shown at Almaris are the correct deadlines. NO EXTENSIONS will be
granted for any reason except medical or family emergencies. If you have
religious or personal conflicts, submit the assignments early. The
related materials are covered well in advance of the assignments. Please
do not email me to request extensions unless you have a medical or
family emergency. Some assignments are short; others are long. Please
manage your time.
Assignments are marked “late” if you do not meet or exceed
the passing score described below before the deadline. There is no
additional penalty for lateness other than a low score.
I set the passing score at 100% if you should ace the assignment.
However, you do not "fail" the assignment if you do not ace
it. Whatever you get on your last attempt is your final score.
Almaris is offering these tests to Stern at no charge since I am a
co-founder of Almaris.
Almaris staff is not authorized to extend deadlines under any
circumstances. Only my TAs can do that. Almaris staff will reply to your
emails only if they pertain to technical issues with the Almaris system.
Please contact Stern IT for technical issues with your network.
Session 4: Integrating forecasts of revenue drivers
Market share and pricing
Superior products
Control of scarce resources
Branding
Network effects
Switching costs
Incorporating revenue drivers into the business plan
Selecting key revenue drivers based on business intuition
Tying projections of these revenue drivers to revenue: We will discuss
the integration of forecasts into financial statements;
we will not discuss statistical forecasting techniques.
Session 5: Relationship between revenues and operating expenses
We strongly recommend that you take Managerial Accounting for an in-depth
treatment of these
Cost behavior
When it makes sense to link expenses to revenues: Variable costs
When the relationship between expenses and revenues is nonlinear: fixed
costs and semi-fixed costs
Long-run versus short-run
How do these relationships between revenues and costs change over the
short-run versus the long-run
Session 6: Operating expense metrics and drivers
Operating expense ratios and margins
COGS/Sales and gross margin
R&D/Sales; Marketing/Sales: When investments are booked as expenses
SG&A/Sales
EBITDA and EBIT margins
Expense drivers
Experience effects
Economies of scale
Economies of scope
Forecasting expenses
Selecting key expense drivers
Collecting forecasting data from internal and external sources
Tying expense forecasts to net operating profit after tax
Session 7: Prepayments and payables
How prepayments require financing: Operating assets
Inventories: Days of inventories
Prepaid advertising, insurance, and rent: Days of prepayments
Long-term prepayments
Property, plant, and equipment: Capacity planning, PP&E turnover
How payables mitigate the need for financing: Operating liabilities
Suppliers: Days of payables
Employee salary and bonuses: Days of accrued expenses
Uncertain liabilities such as warranties
Session 9: Receivables and deferred revenues
How receivables increase the need for financing: Operating assets
Receivables: Days of receivables
Bad debts and allowances: Dealing with defaults
How deferred revenues provide financing: Operating liabilities
Deferred revenues: Days of advance
Session 10: Meeting financing needs partially with debt
Ensuring liquidity: Financial assets
Liquid assets
Liquidity needs in the upside and the downside
Understanding corporate loans using personal finance examples